New Sycamore bid disappoints Talbots investors

Sycamore Partners marginally raised its bid for Talbots Inc to $214.6 million, disappointing investors looking for a more substantial offer that could ensure the sale of the struggling women's apparel retailer.

Talbots said Sycamore had offered to pay $3.05 per share - slightly more than the $3.00 per share, or $212 million, that the private equity firm first offered in December.

The retailer's shares fell 5 percent to $2.63 on the New York Stock Exchange on Monday.

"The worry to some extent is that the board could potentially reject this offer," said Rahul Sharma, managing director of investment management firm Neev Capital.

Sharma said while the new bid is not compelling, Talbots is also not likely to attract rival offers.

"The bargaining power of the company is not very high. The revised offer basically reflects that as well."

Cash-strapped Talbots, once a popular destination for its classic fashion, has been consistently lagging peers Ann Inc and Chico's FAS Inc and its sales have fallen for five straight years.

The company is also looking for a successor to outgoing Chief Executive Trudy Sullivan who unsuccessfully tried to reignite growth at the chain with new store formats and cost cuts.

Those efforts to reach out to younger shoppers met with failure and ended up alienating its core shoppers - women over the age of 35.

Talbots put itself up for sale and opened its books to Sycamore in January, shopping for a higher bid after rejecting the firm's initial offer.

"The board continues to evaluate strategic alternatives, including Sycamore Partners' proposal," Talbots said in a statement.

The company also said it entered an exclusivity agreement with Sycamore, which will end on May 15.

Sycamore declined to comment when contacted by Reuters. (Reporting by Ranjita Ganesan; Editing by Roshni Menon and Joyjeet Das)

archives Talbots Inc

...earlier this year took teen retailer Hot Topic Inc private for $600 million, and last year bought women's apparel chain Talbots Inc for $391 million, including debt.The $15 per share price is a 19 percent premium...

...Partners declined to comment.Sycamore, co-founded by Stefan Kaluzny who had recently acquired retailers Hot Topic and Talbots, is working with Guggenheim Partners on the deal.Jones Group has a market value of $1.1...

...earlier this year took teen retailer Hot Topic Inc private for $600 million, and last year bought women's apparel chain Talbots Inc for $391 million, including debt.Aeropostale last month reported a decline in...

...Drapkin together hold about 8.9 percent of the Hot Topic shares.Sycamore Partners, which acquired women's apparel retailer Talbots last year, is negotiating to buy Australian surfwear company Billabong...

...Ascena Retail Group Inc for $890 million; designer Kenneth Cole taking private the namesake company for $280 million; and Talbots Inc's buyout by Sycamore Partners for $193 million.
There have also been several...

...Women's apparel retailer Talbots Inc, struggling with declining sales and high debt, will be bought by longtime suitor Sycamore Partners for $193.3 million, a price that is slightly lower than the private equity...

...Women's apparel retailer Talbots Inc said Sycamore Partners, with which it had been in exclusive talks for a buyout, was not prepared to execute a deal at this time.Shares of the company plunged 23 percent in...

...Shares of Talbots Inc fell 41 percent on Friday after the company said that exclusive negotiations with Sycamore Partners had ended without an agreement for the private equity firm to buy the women's apparel retailer.

...Women's apparel chain Talbots Inc , which is looking for a new leader, rejected a $212 million buyout proposal from private equity firm Sycamore Partners, and said it would instead explore strategic alternatives.

...Talbots is finally going to replace its chief executive after years of disappointments, and investors cheered the news, sending the lagging stock up 8 percent as they hope the women's apparel chain can finally shed...

...Women's clothing retailer Talbots Inc warned its revenue would fall for a fifth straight quarter while heavy discounting shrinks its margins, knocking off more than a third of the company's market value as...

...Talbots Inc posted a quarterly loss as the women's clothier struggled to keep pace with its clientele's fashion preferences, and said first-quarter sales so far were weak despite offering more discounts.